The Bureau of the Treasury (BTr) fully awarded the reissued Treasury bonds on Tuesday at higher yields amid significant demand for government securities.
The auction for the treasury bonds, with a remaining term of seven years and two months, was 2.1 times oversubscribed, with total tenders reaching P64 billion.
The BTr raised the full program of P30 billion, bringing the total outstanding volume for the series to P455.6 billion.
The auctioned securities fetched an average yield of 6.128 percent.
This is higher than the Bloomberg Valuation Service rate of 6.075 percent for the seven-year tenor and the previous average of 6.124 percent.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, attributed the increase in rate to the uptick in June inflation, which he said was partly brought about by reaction to the 12-day Israel-Iran war until a tentative ceasefire was announced.
“However, it resulted in a net increase in local fuel pump prices following global crude oil prices, still among three-month highs and the US dollar/peso exchange still among 2.5-month highs recently, thereby leading to some pickup in importation costs and overall inflation,” Ricafort said.
Ricafort said the comparable 7-year US Treasury yield also hovered near one-year highs at 4.16 percent on recent US fiscal concerns after President Donald Trump signed into law his $3.4 trillion tax package bill, also amid concerns on higher US tariffs and trade wars that could lead to some pickup in US inflation and reduce the urgency of future Fed rate cuts in the coming months.
